Wednesday, March 4, 2009

Software perspectives

In the first days of the new year, as in the past few weeks last year, IT-community of Russia and the CIS countries are actively discussing the short and medium term regional software market. However, even more so than many on the market, but the entire software industry in the post-Soviet space. Interestingly, the various participants in the debate are sometimes to the opposite conclusions.

In 2007, the Russian market run software grew by 35%. According to experts, the turnover on the Russian market run in 2007 - m amounted to $ 3.7 billion turnover of Russian companies in the world - $ 1.7 billion in 2008 on the Russian market has already risen to five billion dollars. To obtain similar figures for the entire CIS, it is enough to increase the performance of the Russian one and a half times. The structure is sound boxed software sales in 2008, according to the study of association of independent software developers ISDEF, is as follows: 65% sales fall to corporate clients, 20% - in the public sector, and only 15% of software products acquired private users. And the progress - even a few years ago, private (household) users to provide less than 5% of the market for software - piracy is the norm, albeit slowly takes the position. However, all these figures from the experts ambiguous attitude. For example, Famatech CEO Dmitry Kurashev believes that «an objective assessment of the real software market is not easy: the financial information of most IT-companies will not be disclosed».

However, market participants concerned about something else. In the structure of the software market as the reasons for its rapid growth over the past few years, laid, say experts, «mine, finished sdetonirovat at any time». The point is that the mechanism by which to grow sales, was completely identical to the mechanism of growth of the raw materials of Russia's economy. Head of Sales Softline explain these mechanisms as: «The growth of sales of software depends on many factors. Of course, one of the key factors include the redistribution of income from the commodity market, then there are companies that earn more, are willing to spend more, including the acquisition of licensed software. Now, in a crisis (and the fall in oil prices), deprived of easy oil money, private corporate clients can sharply curtail the purchase of software. And that 65% of the market. Already about 70% of Russian companies have taken steps crisis, and many of them save including the updating of existing IT-infrastructure. Of course, the software market believe that just to save on software does not. Thus, the CEO of Alawar Entertainment Lyskovsky Alexander (who is also chairman of the Association of ISDEF) said that the «cut costs by refusing to license the software - still, that does not have to save». Well, director, online supermarket for Softkey Felix Muchnik sure that «Reducing the cost of IT in the company - this is the same as a dismissal of a cook in a restaurant». But not only corporate customers reduce spending on software - private users are not lagging behind. This indirectly contributes to the fact that in 2008, according to experts somewhat overshadowed the process of Russia joining the WTO. And with that, and decreased activity of law enforcement officers in the field of intellectual property protection, including the fight against piracy. Private users feel more secure that there is a negative impact on sales of software for home PCs. Another trend is even more curious: as noticed by experts, private consumers began, where possible, use free software, replacing the expensive commercial programs non-profit counterparts to have less, but sufficient functionality. That is, we can say that the level of technical literacy average user is increasing, along with his legal knowledge.

Summarizing all the above. Year 2008 financial plan was for the most successful software companies in Russia and CIS countries in the history of this market. But by the end of the year the situation has been very heavy, near-critical. And now the company is seriously thinking about how they survive at all in 2009. For information on how to realize the huge potential growth market, that market participants will consider later. However, the most farsighted begin to act now. The Russian company Softline has launched a venture fund volume of $ 20 million fund will invest in small companies engaged in software development. In Softline believe this area is very promising, while noting that the financial crisis is difficult to look for new projects.

For information: company Softline operates on the market since 1993. The main area of activity - sales of software. Also Sofline is IT consulting and training. Turnover in 2007 amounted to $ 292 million, exceeding three times the figures of 2006.

Child venture fund Softline Venture Partners (SVP) is planning to invest in software developers in Russia and CIS. This told the head of corporate finance unit Softline Igor Chekun. At first planned to use their own funds, while total fund intends to invest in start-up to $ 20 million Igor Chekun said: «The company is considering investing in start in the field of software development, which have interesting developments in various fields of IT-market. We would like to make the first investment in the first half of 2009 ». Softline now considering the possibility of attracting funds from the fund «Russian Venture Company» and other investors. The volume of investment in one project will, on average, at $ 500 thousand - $ 1 million fund is scheduled to yield at least 35%. However, other market participants are not confident in the success of Softline Venture Partners. Top-manager of one of Russia's largest venture funds said: «IT start-finding in the current environment is not easy - there is almost no new projects under construction. On the other hand, existing startups poumenshilis appetites - they are willing to negotiate with the venture capital community on a much more favorable conditions for the funds ». According to the Director of Venture Capital Investment «Troyka Dialog» Artema Yuhina, in the presence of free funds to invest in IT - one of the best ways of investing money. In turn, the director of a venture investment fund ABRT Nicholas Mitushin sure that the project venture fund Softline be successful, as the company invests its own money to the project. Mitushin said: «Investing in a software company so well that they almost immediately generate revenue and save money. Example - a company dealing with virtualization».

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